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Property slump hits Carphone Warehouse

Broadband deployments drag down figures

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Carphone Warehouse hasn't been connecting as many ADSL customers as it had hoped, though apparently it's all the fault of the housing slowdown and booming sales of mobile broadband.

Overall revenue is up by 12 per cent over the last 12 months to £4.5bn. "Headline profit" jumped 75 per cent to £216m, while "statutory profit before tax" - ie, what it sends in to Companies House - was up 81 per cent to £124m. The company now has 1600 unbundled exchanges, which increases the income from every customer on one of those exchanges – two thirds of the 2.7 million to whom CPW provides broadband.

But the 442,000 new customers this year weren't as many as expected, and the company attributes this to "the slowdown in the housing market and a strong performance in mobile broadband sales in our stores have led to lower gross adds."

When the deal with Best Buy was announced Charles Dunstone, CEO of CPW, waxed lyrical about multiple-laptop homes, comparing computers with the phones of 20 years ago which were generally one per home. Now it seems many of those laptops are choosing mobile broadband over Wi-Fi connections to fixed ADSL.

So the company is predicting slower growth over the next few years, but expects to make more money out of its existing customers, an attitude that the markets rewarded by cutting nearly 20 per cent off its share price brining it down to 185 pence, the biggest drop since CPW floated in 2000. ®